Quantum of Damages for Wrongful Termination of Private Employment

In the Supreme Court of Nigeria

Holden at Abuja

On Tuesday, the 27th day of February, 2024

Before Their Lordships

John Inyang Okoro

Uwani Musa Abba Aji

Helen Moronkeji Ogunwumiju

Tijjani Abubakar

Emmanuel Akomaye Agim

SC.406/2018

Between

SKYE BANK PLC                                         APPELLANT

And

ADEDOKUN OLUSEGUN ADEGUN                       RESPONDENT

(Lead Judgement delivered by Honourable Emmanuel Akomaye Agim, JSC)

Facts

The Respondent was employed into the service of the Oyo Branch of the Co-operative Bank Plc now Skye Bank Plc, as an account officer on 3rd July, 1995. He was subsequently, promoted to the position of an officer on the Bank’s Salary Group 12 in April 2005. On 29th November, 2005, inspectors from Bank’s head office visited the work station of the Respondent, to inspect the Bank Books in that Branch. Following the inspection, they discovered that between August 2004 and December 2005, some of the Bank’s funds amounting to N16.8million were fraudulently withdrawn, and were actually paid by the Respondent to unidentified beneficiaries. As a consequence of the fraudulent withdrawals, the Bank queried the Respondent’s participation in the illegal withdrawals, and requested his reply to the allegations against him via a letter dated 6th December, 2005.

The Respondent replied by a handwritten letter dated 6th December, 2005 in which he denied participating in the fraud, and promised to be more vigilant and to report any irregularities to the Bank. On 15th December, 2005, the Bank wrote a letter to the Respondent, giving him a long service award and appreciating him for a noble and selfless service to the Bank. Subsequently, on 30th December, 2005, the Bank wrote to the Respondent to convey its decision on his response to query issued earlier by the Bank. The Bank indicted the Respondent, and issued a caution against him to be more alive to his responsibilities.

Subsequently, the Co-operative Bank Plc merged with other financial institutions to form Skye Bank (the Appellant). After the merger, the Appellant transferred the Respondent to its Inspectorate Department as Resident Internal Control Officer by a letter dated 25th January, 2006. During the said period, the Appellant constituted an Integration Team which reviewed the Respondent’s case and other similar cases. On 29th March, 2006, the Appellant wrote a letter to the Respondent summarily dismissing him from the service of the Bank, on the basis of the allegation of fraudulent withdrawals made against him before the merger between Co-operative Bank and Skye Bank.

Aggrieved, the Respondent filed an action against Appellant at the High Court of Oyo State, seeking inter alia, a declaration that his summary dismissal is illegal, null and void and an order setting aside the same; an order that he is still in the employment of Appellant until his employment is properly and validly determined. He also sought for payment of N6,600,000.00 as his basic salary and allowances from April 2006 to April 2008; payment of N550,000.00 per month from March 2006 until the delivery of judgement, payment of N550,000.00 per month from the date of judgement until the proper determination of his appointment by the Appellant; payment of N600,000.00 as his unpaid leave bonuses for the years 2004, 2005, 2006 and 2007 and payment of N521,000.00 as his gratuity pursuant to his transfer from Co-operative Bank to the service of Skye Bank. 

The Appellant on its part, counter-claimed against the Respondent for the sum of N209,572.62, being the sum it claimed to have advanced to the Respondent as its employee.

After the conclusion of trial, the trial court delivered its judgement in which it held that the Respondent’s dismissal is wrongful but, albeit effective, and that he was entitled to damages in terms of salary for one month in line with the agreement of parties that the contract can be terminated by either party following one month notice. On the other hand, the trial court dismissed the Appellant’s counter-claim.

Being dissatisfied mainly with the quantum of damages applied by the trial court, the Respondent appealed to the Court of Appeal. The Court of Appeal in a unanimous decision allowed the appeal, and held that the Appellant after meting out the disciplinary measure of caution in the letter of 7th December, 2005, thereafter investing the Respondent with a long service award for 10 years noble and meritorious service, then training him and re-assigning him as Resident Control Officer, is without the emergence of new facts, estopped from summarily dismissing him on the same facts as the facts that formed the basis of the initial caution letter. The Court of Appeal however, held that even though the dismissal was wrongful, it is effective with a resulting liability on the part of the Appellant to pay the Respondent’s entitlement in lieu of the contract of service. The Court of Appeal set aside the award of one month salary in lieu of notice made by the trial court, and ordered that the Respondent be paid all the entitlements he claimed for till the date the suit was filed .

Dissatisfied, the Appellant filed an appeal at the Supreme Court. 

Issue for Determination 

The Supreme Court considered the following issue in its resolution of the appeal: 

Whether there was any material basis whatsoever, for the Court of Appeal to have upturned the assessment of damages made by the trial court. 

Arguments

Counsel for the Appellant argued that there was no material basis for the Court of Appeal to have set aside the award of one month salary in lieu of notice made by the trial court, and proceed to grant Respondent’s claims to payment of the entitlements he sought in his statement of claim. He submitted that the assessment made by the trial court was based on a proper evaluation of evidence led before it, and the Court of Appeal wrongly interfered with the same.

Conversely, Counsel for the Respondent argued that the summary dismissal of the Respondent by the Appellant, was in breach of terms of the Respondent’s contract of employment. He submitted that the Court of Appeal rightly ordered that the Respondent be paid all the entitlements he claimed against the Appellant, for breach of his contract of employment.

Court’s Judgement And Rationale

The Court held that where a contract of employment is brought to an end by the employer contrary to the terms agreed therein, the quantum of damages awardable therefore, cannot be based on the remuneration of the employee during the period of notice prescribed in the agreement for either party to terminate the agreement. The Court held that the employer cannot enjoy the benefit he would have enjoyed if the contract had been brought to an end in accordance with the contract, and to limit the damages payable by the employer to one month salary in lieu of notice as in this case, would amount to enabling it to benefit from its wrongful act in breach of the contract.

The Apex Court held further that an employer who brings a contract of employment to an end in breach of the contract, cannot restrict the quantum of damages awardable to the employee to the terms prescribed in the contract; and the quantum of damages awardable to the employee in such a situation, should be in accordance with the general law on contract on award of damages for breach of contract, which would involve a consideration of the consequential loss that has arisen or would arise from the breach of the contract of employment, having regard to the monthly wage, current age of the employee and the due date of retirement.

The Court held that it is implicit in the terms of the Respondent’s contract of employment tendered before the trial court, that the Respondent was entitled to continue in his employment with the Appellant until the employment is brought to an end in accordance with the terms of the contract of employment by one month notice. Therefore, having summarily brought the Respondent’s employment to an end in breach of the terms of the contract of employment and contrary to Article 4 Procedural and Main Collective Agreement between the Nigerian Employers of Banks, Insurance and Allied Institutions which binds the Respondent’s  employment as the Appellant had admitted, the Appellant cannot expect to pay damages based on the quantum prescribed in the contract of employment where the Appellant simply terminates the Respondent’s service contract by giving him the requisite one month notice as agreed between them. 

The Supreme Court agreed with the Court of Appeal that the Appellant was estopped from re-disciplining the Respondent after it had led the Respondent on to believe that he had been left off the hook by the initial caution letter, and the Appellant’s summary dismissal of the Respondent on the same facts amounted to wrongful dismissal.  

The Apex Court held that the Respondent in his statement of claim had specifically pleaded facts and led evidence to show the consequential losses he suffered as a result of his wrongful dismissal by the Appellant, and these included his inability to get employment in another organisation for having been dismissed for purportedly committing a criminal offence, his inability to earn an income to support his family and dependents, the material and emotional damage he suffered, and what his cumulative entitlement would have been if he had not been wrongfully dismissed by the Appellant. The Court held that it is obvious that it was on the basis of the averments and the oral testimonies of the Respondent’s witnesses, that the Court granted the reliefs sought by the Respondent for the payment of all the entitlements till the date the suit was filed. The Court found further that there is no ground of appeal complaining against the grant of these reliefs by the Court of Appeal on the basis of the oral testimonies of the Respondents, and by not appealing against the award of those reliefs, the Appellant accepted the grant as correct, conclusive and binding. The Court referred to IYOHO v EFFIONG (2007) 4 SC (PT. III) 90 and NBCI v INTEGRATED GAS (NIG.) LTD and ANOR (2005) LPELR -2016 (SC). On the basis of the foregoing, the Supreme Court affirmed the decision of the Court of Appeal. 

Appeal Dismissed.

Representation

Prince Adeyemi Adekile for the Appellant.

Prince Abioye Oloyede–Asanike, SAN with Mayowa Adeyemo for the Respondent.  

Reported by Optimum Publishers Limited, Publishers of the Nigerian Monthly Law Report (NMLR)(An affiliate of Babalakin & Co.)